PRECIOUS-Gold drops 1% on firmer dollar, hopes of economic recovery

(Updates prices)
* Palladium slides after hitting 1-month high on Wednesday
* Focus on U.S. initial jobless claims data due at 1230 GMT
* For an interactive graphic tracking the global coronavirus
spread, open tmsnrt.rs/3aIRuz7 in an external browser
By Brijesh Patel
May 21 (Reuters) - Gold slipped 1% on Thursday, pulling away
from this week's 7-1/2 year peak as the U.S. dollar strengthened
and hopes for a quick economic recovery dented bullion's
safe-haven appeal.
Spot gold was down 0.7% at $1,736.64 per ounce at
1203 GMT. U.S. gold futures fell 0.8% to $1,738.30 per
ounce.
The dollar index , which compares the U.S. currency
with a basket of rivals, rose 0.3%, making gold more expensive
for holders of other currencies.
"Gold seems to have lost a little momentum since breaking
above $1,750, and the rise in the dollar today doesn't seem to
be helping," OANDA analyst Craig Erlam said.
"However, the enormous amount of monetary stimulus in the
system, the need for that to continue for some time and the
inflation risk are all bullish for gold in the longer term."
Gold prices climbed to their highest since October 2012 at
$1,764.55 earlier this week, mainly driven by monetary and
fiscal stimulus, recession fears, and U.S.-China tensions.
U.S. Federal Reserve policymakers acknowledged the
possibility of further support measures if the economic downturn
persists, the minutes from their latest policy meeting showed.
The focus now shifts to initial U.S. jobless claims data due
later in on Thursday for further clues about the health of the
world's biggest economy.
The devastating impact of the coronavirus pandemic on the
euro zone economy has abated a little this month as some
governments eased lockdowns, a survey showed.
"The yellow metal remains locked within a $40 range
($1,760-$1,720) and should continue to find solid interest
toward the lower end over the near term," MKS PAMP said in a
note.
Among other precious metals, palladium dropped 1.8%
to $2,063.86 an ounce after hitting a one-month high on
Wednesday. Platinum shed 1.1% to $841.37.
Silver dipped 1.6% to $17.22 an ounce.
(Reporting by Brijesh Patel in Bengaluru; Editing by Mark
Potter/Jan Harvey/Jane Merriman)